The High Court has dismissed a husband’s application to prevent an affidavit and internal solicitor memoranda about a property mortgage from being disclosed to a bank involved in proceedings to enforce a divorce decree.
Mr Justice Abbott’s judgment, delivered on 23 April 2010, concerned a dispute between E.S. and B.S. arising during execution of their divorce settlement. The bank was a notice party but had not yet taken part in the proceedings.
The 2007 divorce order required B.S. to transfer his interest in a property identified as H.P., valued in the order at €2.2 million, to E.S. free of encumbrances, and to pay her €550,000. The transfer and payment were due by 15 February 2008. The judgment records that B.S. did not meet those obligations by that date or later. He received an extension to 1 October 2008, while the applicant’s enforcement motion was adjourned.
E.S. later said she learned from an affidavit that B.S. had increased the mortgage on H.P. by €640,000 before the 2007 divorce order. B.S. said the additional borrowing was to fund redevelopment of another property, S.A. E.S.’s representative inspected S.A. and claimed no work had been carried out there; the judgment does not make a finding on that inspection claim in this application.
The conveyancing solicitors had prepared an affidavit containing internal memoranda about whether the additional mortgage was permissible while divorce proceedings were pending. They had also certified title to the bank. B.S. had consented to the affidavit being provided to the court, but objected to E.S. serving it on the bank, arguing that disclosure would breach legal professional privilege and the implied undertaking governing documents obtained through discovery.
The judge rejected that objection and dismissed B.S.’s application. He concluded that the memoranda were connected to work for which the solicitors also acted for the bank by certifying title, and that the implied undertaking did not prevent disclosure to the bank in these proceedings. He also held that the family-law disclosure context and the bank’s role as a notice party supported disclosure.
The ruling addressed whether the affidavit and memoranda could be disclosed to the bank. It did not decide the separate dispute over setting aside the mortgage or the requested alteration of the divorce decree. The judgment states that, regardless of other issues about whether the court had been misled before the divorce decree, B.S. had misled E.S. and the court about the non-existence of the top-up mortgage before the parties signed their divorce consent.